Clothing Stores NAICS 4581

May 16, 2025 - Spike in Retail Job Cuts

• According to a new report in Retail Dive, the retail sector had 64,319 job cuts in the first four months of 2025, a nearly 300% increase year over year, and was the second-leading industry in job cuts. The Challenger, Gray & Christmas report found retail job cuts were up almost 80% year over year in April 2025, reaching 7,235. According to Andrew Challenger, an SVP at the consulting firm, “Generally, companies are citing the economy and new technology. Employers are slow to hire and limiting hiring plans as they wait and see what will happen with trade, supply chain, and consumer spending.” The US lost 603,000 jobs in total across all industries, the most since 2020, when over one million job cuts occurred. According to the report, nearly half of the cuts in the first four months were attributed to job eliminations by the Department of Government Efficiency (DOGE).
• According to the Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates, import cargo at major US container ports is expected to see its first year-over-year decline in more than a year and a half in May 2025, projected to decrease nearly 13%, due to tariff turmoil. Imports are expected to be down at least 20% year over year from June 2025 into the fall, and volume for the year could fall by more than 10%. A series of tariffs imposed by the Trump administration since February have come at a key time in the buying process for retailers, with many retailers pausing or canceling orders as a result. Jonathan Gold, NRF VP for Supply Chain and Customs Policy, said the effects of the tariffs on the supply chain are becoming apparent, noting, “From national security tariffs on Canada, Mexico and China to global and reciprocal tariffs on all countries and a multitude of tariffs on specific sectors, the results will include higher costs for businesses as well as reduced cargo volumes. In the end, these tariffs will affect consumers in the form of higher prices and less availability on store shelves.” Tracker data showed that US ports handled 2.1 million 20-foot equivalent units (TEU) in March 2025, up 11.1% year over year, and a projected 2.2 million TEU in April 2025, expected to be up 9.1% year over year.

• The Trump administration has been making changes to the trade rule provision known as de minimis. An executive order by President Donald Trump ended the de minimis rule that had exempted lower value goods (valued at $800 or less) from duties and tariffs for goods from China, effective May 2025, according to the Wall Street Journal. After a 90-day trade truce was announced with China in mid-May, the US then lowered tariffs for low-value parcels from 120% to 54%, with a flat fee of $100 to remain. Trump had suspended the provision back in February as part of his order announcing a new 10% tariff on imports from China. However, the suspension was delayed following the backup of packages at ports. The rule became a factor as fast fashion e-commerce retailers like Shein based in China used the exemption to ship their goods to US buyers. According to government data, the number of shipments entering the US using the exemption in the last four years increased from 637 million per year to over 1 billion per year.
• Consumers may adjust their clothing spending as consumer sentiment, an indicator of discretionary spending, continues to fall in large part due to tariff uncertainty and an expectation of higher prices, according to two major indicators. The final index of consumer sentiment from the University of Michigan dropped 8% in April 2025 from the previous month, according to CFO Dive. An index measuring consumers’ expectations for the future fell nearly a third since January, the steepest three-month percentage decline since the 1990 recession. According to survey director Joanne Hsu, “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.” The Consumer Confidence Index declined by 7.9 points in April 2024, compared to the previous month. Consumer confidence levels have fallen for five consecutive months, reaching levels not seen since the beginning of the COVID pandemic, according to The Conference Board, which publishes the monthly index.